UK businesses driving innovation and development will be helped through the coronavirus outbreak with a £1.25 billion Government support package. This is specifically designed to focus on companies driving innovation – including those that are not yet profit generating. 

Rishi Sunak has said that the targeted support would ensure firms in some of the most dynamic sectors of the UK economy –ranging from tech to life sciences – are protected through the COVID-19 crisis so they can continue to develop innovative new products and to help UK growth.

The package includes a new £500 million loan scheme for high-growth firms, called the Future Fund, and £750 million of targeted support through Innovate UK for small and medium sized businesses who are focusing on research and development.

Future Fund

Launching in May and delivered in partnership with the British Business Bank, the Future Fund will provide UK-based companies with between £125,000 and £5 million from the Government with private investors equally match-funding the Government’s commitment. These loans will automatically convert into equity on the company’s next qualifying funding round (or at the end of the loan if they are not repaid).

The scheme is suitable for companies that are unable to access the Coronavirus Business Interruption Loan schemes (CBILs) and who are funded by external investors. To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third party investors in the last five years.

The scheme will run from May - September and is at present capped at £250 million of government money. Companies who require funding before the end of May are advised to seek alternative sources of financing through their usual lending channels.

Innovate UK

The national innovation agency Innovate UK will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The first payments will be made by mid-May.

This package builds on the government’s existing support for innovative, high-growth SME firms including the £2.5 billion British Patient Capital fund, the upcoming £200 million Life Sciences Investment Programme, internationally competitive R&D tax reliefs and our major commitments to increase public R&D spending to £22 billion by 2024-25.

Audit Manager, Malik Salim says

“I welcome the Government’s package to support those businesses who are contributing to the economy and those who are working toward future growth. Although the full details of the Future Fund are yet to be announced, I can see that this will be a sought after package by the clients I work with in the innovation space.

At Shaw Gibbs we work with a network of contacts who can assist with Innovate UK Grant applications and we can assist with the compliance around the funding. In the fullness of time, I imagine the Future Fund will have a similar application process so it is worth innovative companies scoping out advisers now to ensure they are up to speed and ready to make the application before the fund launches ”

If you would like to arrange a virtual meeting to discuss your specific circumstances in relation to any of the above, please get in touch with your usual Shaw Gibbs contact or contact me.